The Delaware State Housing Authority (DSHA) unveiled its “Diamond in the Rough” program, an innovative lending solution designed to make homeownership more accessible and affordable for Delaware residents. Leveraging the Federal Housing Administration’s (FHA) existing limited 203k program, this initiative provides a comprehensive mortgage product that combines home purchase costs with funding for minor renovations up to $35,000.

The “Diamond in the Rough” program streamlines the financial process for homebuyers by consolidating the purchase price and approved renovation expenses into a single mortgage. This integrated approach empowers buyers to complete necessary repairs and upgrades after closing, ensuring their new home meets their needs and preferences. Additionally, eligible participants will receive 5% of their final loan amount in the form of a second mortgage to assist with down payment and closing costs, reducing the upfront financial burden.

We are extremely proud to launch the Diamond in the Rough program, which embodies our mission to make homeownership more attainable and sustainable for Delaware residents.

By combining an FHA program with our down payment and closing costs assistance, we provide a comprehensive, localized solution that helps homebuyers turn houses that need a little love into their dream homes.

Cynthia Karnai, Director of DSHA.

The program supports a range of minor home renovations, including kitchen remodeling without structural changes,  interior and exterior painting, appliance replacements and upgrades, window and door replacements, roof, gutter, and downspout repairs or replacements, and even pool repairs.

By encouraging the transformation of homes in need of minor updates, the  program fosters community revitalization and enhances neighborhood appeal.

In addition to the “Diamond in the Rough” program, DSHA offers four additional mortgage products to assist Delaware residents in achieving homeownership:

Smart Start Home Loan: A first mortgage loan with competitive interest rates at or below current market rates for conventional and government loans.

Home Sweet Home Program (Temporary): A zero-interest, forgivable second loan of $12,000 for down payment and closing cost assistance on homes with a maximum sales price of $285,000 or less.

Delaware Diamonds Home Loan (Temporary): A zero-interest, forgivable second loan of $10,000 for down payment and closing cost assistance for essential workers in education, medical fields, first responders, and veterans. To view the eligible occupation list, please visit: https://kissyourlandlordgoodbye.com/help-for-homebuyers/.

First State Home Loan Program: A zero-interest second loan providing 4% of the first mortgage amount for down payment and closing cost assistance, with deferred principal until refinancing, sale, transfer of title, or the property is no longer the borrower’s primary residence.

The “Diamond in the Rough” program and DSHA’s other homeownership initiatives are available statewide through participating lenders listed at https://kissyourlandlordgoodbye.com/. Income limits for these programs have been adjusted to provide more opportunities for Delaware residents to purchase homes.

Homebuyers participating in DSHA’s programs must meet eligibility requirements, including income limits and a minimum credit score of 620. DSHA also offers financial counseling through HUD-approved housing counselors to assist potential homebuyers in improving their credit scores and preparing for homeownership. Income limits for these programs can be found on DSHA’s homeownership website: https://kissyourlandlordgoodbye.com/.

For more information about the Delaware State Housing Authority and its homeownership programs, please visit www.destatehousing.com or call (302) 739-4263.